From Resource Base to Dynamic Capabilities: an Investigation of New Firms

Abstract

Despite the numerous observations that dynamic capabilities lie at the source of competitive advantage, we still have limited knowledge as to how access to firm‐based resources and changes to these affect the development of dynamic capabilities. In this paper, we examine founder human capital, access to employee human capital, access to technological expertise, access to other specific expertise, and access to two types of tangible resources in a sample of new firms in Sweden. We empirically measure four dynamic capabilities and find that the nature and effect of resources employed in the development of these capabilities vary greatly. For the most part, there are positive effects stemming from access to particular resources. However, for some resources, such as access to employee human capital and access to financial capital, unexpected negative effects also appear. This study therefore provides statistical evidence as to the varying role of resources in capability development. Importantly, we also find that changes in resource bases have more influential roles in the development of dynamic capabilities than the resource stock variables that were measured at an earlier stage of firm development. This provides empirical support for the notion of treating the firm as a dynamic flow of resources as opposed to a static stock. This finding also highlights the importance of longitudinal designs in studies of dynamic capability development. Further recommendations for future empirical studies of dynamic capabilities are presented.

Measuring the competitiveness of Latvian companies

“…Namely, several studies (e.g. Man et al, 2002;McKelvie & Davidsson, 2009) indicate that competitiveness of a company is directly linked to the efficiency, motivation, and loyalty of their employees. Besides, generation of new ideas, often coming from the employees, is a factor that increases competitiveness of the company, often through innovations (Subramaniam & Youndt, 2005).…”

“…Furthermore, to ensure competitive business especially in firms where it is necessary to invest considerable time and financial resources in staff training, it is important to provide for optimum job rotation (McKelvie & Davidsson, 2009). In the questionnaire, we asked the company owner-managers to evaluate their employees in regards to each of the aforementioned aspects.…”

“…Buzzigoli & Viviani, 2009;Hoang & Antoncic, 2003;Malecki & Veldhoen, 1993;Man et al, 2002;McKelvie & Davidsson, 2009;Roper, 1998) have identified a range of factors that may potentially foster competitive business when applied separately and/or in different combinations. These factors are summarized in Figure 1.…”

“…McKelvie & Davidsson, 2009), competitive companies, amongst other things, should be innovative, oriented towards providing services and products that have high added value and that are export capable. In addition, competitive companies are able to adapt to the influence of different environmental and time factors while successfully developing their business.…”

“…Thus, we have chosen to analyse what, according to entrepreneurship literature (e.g. Man et al, 2002;McKelvie & Davidsson, 2009), seem to be the most significant factors determining competitiveness of the companies: access to resources (including human resources, physical, and financial resources) and efficiency of their use, business strategies, internal and external communication networks, influence of the external environment, as well as indicators of a company's financial performance as compared to their competitors.…”